We integrate stakeholder agency and institutional theory to assess how home-country institutions shape the effectiveness of CSR contracting, which links executive pay to achieving certain CSR targets. Based on 22,588 observations representing 3,799 public firms and 26 countries from 2007 to 2019, our multilevel analysis shows that both pro-shareholder and pro-stakeholder institutions weaken the impact of CSR contracting on Corporate Social Performance (CSP). This suggests that strong institutions, regardless of their orientation, can act as substitutes for CSR contracting and alter executive discretion in prioritizing CSR commitments. These insights deepen our understanding of CSR contracting within diverse institutional frameworks.